Market forces, landscapes, and technology shape the accounting profession. What are the ways in which the accounting industry is changing? Rapid technological advancements have resulted in rapid change at an accelerated pace. In many ways, the pandemic has accelerated this adoption. The adoption of cloud-based accounting software and automation of artificial intelligence, for example. Find out more about small business accounting and bookkeeping trends and what is accounting and bookkeeping.
The technology and automation industry
In the world of accounting, what’s new? Accountants are experiencing an exciting trend toward automating repetitive accounting tasks. Additionally to approval workflows, bank reconciliation, journal entries, intercompany consolidation, revenue recognition, lease accounting, and depreciation, some processes are automated.
It is possible to automate many accounting functions, but a lack of understanding and resources prevents their implementation. Those who make the leap are reaping the benefits. There is more than 70 percent return on investment for companies that automate their accounting functions.
AI’s role in society
The impact of AI on finance and accounting across industries is widely acknowledged. Using artificial intelligence (AI) and robotic process automation (RPA), companies are automating mundane, highly repeatable tasks, allowing accountants to focus on higher value activities. By applying artificial intelligence to lease contracts, EY, for example, is able to capture information more quickly on commencement date, payment amount, termination or renewal options. Therefore, finance professionals are able to make better decisions by spending less time searching for data.
Using accounting software
RPA needs to standardize and merge transactional data from multiple sources in multiple formats in order to be successful. Integrating structured, semi-structured, and unstructured data is possible. AI requires a lot of data to be effective. Above all else, accountants must trust enabling technologies. This can be accomplished with accounting software.
36% of companies plan to implement cloud-based accounting solutions within the next few years. Integration of accounting software and financial data can be done with other important areas of your business, such as supply chain, order management, and production management. Integrated ERP platforms give you a more comprehensive view of your business by integrating these different areas.
Tools for data analytics and forecasting
One of the most effective accounting tips for small businesses and larger companies is to use budgeting, forecasting, and planning software, as well as data analytics and visualization tools. Accountants and finance departments are becoming more analytical, relying on technology to move from a reactionary to a proactive approach. In response to the growing demand for analytical and tech-savvy accountants, the IMA introduced a Certificate in Data Analytics & Visualization Fundamentals. The program develops critical thinking, problem-solving, and technology skills in accounting and finance professionals.
Transforming the digital world
With the aid of digital technology, accounting and finance teams have been at the forefront of transforming organizations’ business practices faster than ever before. Consequently, they have developed processes to account for subscription models, new channels, and new physical and digital products. Business strategy and adaptability to changing conditions are the most pressing accounting challenges.
Wellness at Work
The management of workplace wellness programs can be challenging for accountants, as well as a popular perk provided by employers. Accountants and payroll managers should ensure wellness program discounts are calculated correctly in employees’ paychecks as withholdings. Changes in tax laws also affect how wellness program items qualify for tax deductions, which accountants should be aware of. Employee wellness programs can boost employee health and engagement. The overwhelming number of responsibilities reported by accountants can lead to burnout and stress, so they should use programs whenever possible to mitigate these problems.
Remote work and online collaboration
With the trend toward remote working, cloud-based software enables teams that are geographically dispersed to collaborate and complete critical financial processes, such as month-end close, from anywhere. In accounting, collaboration tools like Zoom, Fort, and functional collaboration tools like Fort will be needed for e-signature and cloud-based file sharing.
The role of the accountant has evolved over time
Accountants will be seen as leaders and decision-makers as accounting’s transactional work becomes increasingly automated. Accountants are becoming increasingly required to possess soft skills, leadership qualities, and emotional intelligence traits. In the future, successful careers will be made possible through leveraging insights from data analysis and financial expertise.
Keeping data secure
Data breaches are on the rise, and finance departments are particularly vulnerable. Spoofing occurs when emails are disguised to appear to come from a trustworthy source, which can lead to identity theft and credit card fraud. Training on recognizing potentially harmful emails and spotting attacks will continue to benefit accounting teams, which are already skilled at reviewing details and spotting anomalies. You can make the accounting team champions of cybersecurity in your organization.
Inflation and tax policy changes
In the latest Consolidated Appropriations Act, nearly 6,000 pages must be read by accounting professionals. This is the latest in a string of changes to tax policy and regulation, including tax extenders, deductions for PPP expenses, and simplified procedures for PPP loans under $150,000. The ability to navigate shifting trade and tariff policies and determine the total tax liability depends on understanding tax policy changes.